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3. The next point that has been urged by Mr. Banerjee is that the assessee had a packing credit sanctioned by Syndicate Bank, Nariman Point, Bombay, to the extent of Rs. 25 lakhs. This was enhanced to Rs. 175 lakhs. On the very date of enhancement of the packing credit, a sum of Rs. 165 lakhs was advanced to M/s Malabar Cashew Nut and Allied Products (MCAP) through a cheque drawn on Syndicate Bank, Nariman Point. Therefore, according to Mr. Banerjee, the capital borrowed from the Syndicate Bank was siphoned to MCAP as interest-free advance. He has pointed out from the assessment order that though it was pointed out by the assessee that the advance was made to MCAP for supplying raw materials namely, cashew nut to the assessee, but in fact, it had not supplied any raw material. On the other hand, it had returned the amount in two instalments namely, Rs. 123.8 lakhs on 11th June, 1984, and the balance of Rs. 41.2 lakhs in September, 1984. At the same time, he pointed out to the findings of the AO that the annual accounts of MCAP for the year ended 31st Dec., 1982, revealed that the firm MCAP was insolvent and had a debit balance in the partners' capital for a sum of Rs. 142 lakhs and on 31st Dec., 1983, the debit balance of Rs. 119 lakhs. He further pointed out that the advance was made to MCAP without any security and without any stipulation for payment of interest, whereas the assessee had paid 12 per cent interest on the packing credit to Syndicate Bank. On this ground Mr. Banerjee wanted to emphasize that this advance was not made for business purpose but for some extraneous reasons and, therefore, it could not satisfy the ingredients of Section 36(1)(iii). Scope of Section 36(1)(iii):

Whether the advance was made for business purpose within the meaning of Section 36(1)(iii):

5. On this point, the findings of the learned CIT(A) and the learned Tribunal are otherwise. The CIT(A) found that the finding by the AO was totally incorrect (paper book p. 55). Dr. Pal pointed out from para 6 of the decision by the CIT(A) that out of the interest-free advance of Rs. 165 lakhs, MCAP supplied cashew nut kernels to the assessee-company between the period December, 1983 and June, 1984 amounting to Rs. 91.45 lakhs out of the total cashew nut export of the assessee of Rs. 120.75 lakhs for the period ended 30th June, 1984, which accounted for 70.45 per cent of the total cashew nut kernels exported by the assessee in that year. At para 9 (paper book p. 57) the CIT(A) found that the AO had misstated the facts in his order. This finding was affirmed by the learned Tribunal at para 7 of its order where it had found that out of the total export of the cashew nut kernels of Rs. 129 lakhs in the asst. yr. -1985-86, an extent of Rs. 91 lakhs was supplied by MCAP to whom advance was made by the assessee. Thus, the finding, which is a finding of fact, becomes a concurrent finding of fact concluded by the CIT(A) and the learned Tribunal.

5.2 As soon it appears that the advance was made for obtaining supply of raw materials and out of which certain portion of raw materials representing almost 70 per cent of the total advance is made, in that event, it cannot but be held that the advance was made for the purpose of business and the advance cannot be said to have been made for any other consideration extraneous or otherwise.

5.3 Mr. Banerjee had relied on the decision in CIT v. Orissa Cement Ltd., (2002) 258 ITR 365 (Del) to support his contention. In the said decision reliance was placed on CIT v. Motor General Finance Ltd., (2002) 254 ITR 449 (Del), where it was held that it was for the assessee to prove that the bona fide loan has been granted in favour of a sister-concern and it is the assessee's duty to place the requisite material on record. In the present case, both the learned CIT(A) and the learned Tribunal had found on the basis of the materials placed by the assessee that 70 per cent of the total export was met by the supply of cashew nut by MCAP. Therefore, this decision does not help Mr. Banerjee, having regard to the facts and circumstances of the case. Mr. Banerjee also relied upon CIT v. H.R. Sugar Factory (P) Ltd. . There it was found that the sugar factory had advanced various sums to its directors and shareholders at a very low interest without being financing company but engaged in the manufacture of sugar and on facts it was held that these advances were made not for the purpose of business of the assessee. Thus, this decision has not laid down any principle, which can support Mr. Banerjee in his contention.

5.4 On the other hand, Dr. Pal relied on the decision in CIT v. Gillanders Arbuthnot and Co. Ltd. . There it was held that the assessee was engaged in the business as a holding company of financing its subsidiaries and, therefore, the money lent to such subsidiaries were held to be lent and advanced in course of its business. In the present case, MCAP might be a partnership firm constituted of some near relations outside the purview of the definition of relatives under Section 2(41), yet the advance was made for the purpose of its business for exporting cashew kernels in order to secure consistent supply of quality cashew nuts for export business of the assessee, a fact similar to the facts considered in the said case.